Friday, October 31, 2008

An Inquiry into the Distribution of the Wealth of Peoples

(it doesn't appear I can post the accompanying graph =/ )

An Inquiry into the Distribution of the Wealth of Peoples

Distributism is an Outline of Sanity. While laissez-faire capitalists attack it as socialism under any other name, and socialists are unable to understand the difference between the two theories, Distributism is quite distinct from both. Essentially, Distributism is the startling idea that there is more to life than raw, mathematical economic growth or equality of income.

The theory was originally developed by a small circle of friends headed by G.K. Chesterton and Hilare Belloc around the turn of the twentieth century. The foundational text of the theory is the Outline of Sanity, in which Chesterton lays out the key criticisms of the laissez-faire capitalist approach (as was being practiced in the England of his day) and discusses what a healthy socioeconomic situation should look like. However, Distributism was then, and still is, and nascent theory, and there are no dogmatic policy recommendations in the text, instead, today’s Distributists must approach the status quo with independent analysis in order to develop beneficial ways to arrive at Chesterton and Belloc’s vision.

While the theory was officially born of that circle of friends, the foundations and inspiration of the movement are found in the Papal Encyclicals Rerum Novarum and Quadregisimo Anno, which outline Catholic Social teaching. This being said, it is necessary to define the theory.

Distributism mainly deals with the idea of property. While typical capitalists claim that their theory is the most supportive of private property, Distributism claims to supersede the laissez-faire doctrine. Perhaps the criticism is best explained by Chesterton himself: “Too much capitalism does not mean too many capitalists, but too few capitalists.” Everyone should own a reasonable amount of property. Socialism wants to abolish the ideal; Capitalism favors the concentration of property into the hands of an oligarchy. Both of these are the enemies of freedom, as they deprive the majority of humanity of their individual freedom and power that comes with property. While Capitalists rely on the expression of the “free market” in order to justify their theory, when this happens, Capitalism concentrates wealth more and more, until it begins to look suspiciously like Socialism, except that big business rules instead of big government. And after that, it becomes impossible to distinguish between big business and big government, and essentially, we have the exact same thing. Some will almost certainly respond to this with the assertion that “Socialism has failed; Capitalism has succeeded.” The Distributists warns that person not to be too hasty. Just because the U.S.S.R. lost the Cold War does not mean that the Capitalist can write off every other economic theory. Furthermore, who is to say that the United States will not crumble tomorrow? The Capitalist cause is not yet won. In the end, both Capitalism and Socialism work to end up in the same place. Distributism vehemently opposes this oligarchy.

However, Distributism must do more that simply oppose the twins Socialism and Capitalism and stand for something on its own. It does indeed fulfill this requirement. Distributism is the unabashed promotion of private property. Every man should own some property and some means of production. “Wage slavery” as Chesterton called it greatly inhibits the freedom of the individual and only serves to continue concentrating wealth. While this is not necessarily a bad thing on a small scale, almost all jobs today are wage jobs. The entrepreneurial class is dying, and this theory seeks to rejuvenate it. According to Chesterton, a large class of entrepreneurs and small business owners would be the most dangerous single socioeconomic arraignment to those who would concentrate power into the hands of a few. Big corporations have great influence in the U.S., while the government is a *tad* too influential in China. Both are enemies of the freedom and self-governance of the populace.

Some attack the theory by arguing that it somehow futility opposes the law of comparative advantage and the division of labor. Perhaps this is true to some extent. However, specialization would clearly continue; however, the theory does indeed oppose specialization to approaches the limits of insanity. For example, having five hundred people all doing one single task over and over and over again in order to make a pin is psychologically damaging. While some would argue that this is necessary to bring down the price and increase output, perhaps the world does not need so many pins. Perhaps if the process were unspecialized, pins would also be expensive enough to make a wage on, without creating an excess of the product. This allows the laborer to maintain his sanity while still meeting the world’s demand for pins.

As the graph demonstrates, a reworking of our economy could indeed make less efficient pin production quite sustainable. If the entire industry went back to smaller shops, the price would increase because of the shift of the supply curve; however, there would not be the drudgery of picking five hundred thousand pins of one production line, and then placing them on the next. Furthermore, if the entire economy switches, then there will be little to no actual change in PPP (purchasing power parity) as workers will both earn and pay more. Distributism does not destroy equilibrium, but it does re-center it with new a new equilibrium price and equilibrium quantity.

Here, it is necessary to note that Distributism is a normative economic theory, not a positive economic theory. Chesterton and Belloc do not claim to be able to buck the stars and control the invisible hand. Instead, they simply realize that there is more to life than what might appear most economically beneficial, and so justify innumerable actions with the shallow claim that it is best for the markets. Furthermore, the Distributist movement reminds the world that “Not all that glitters is gold.”

Distributism has no track record, and so its solvency in the real world is still theoretical. While I believe the Distributist cause is unlike in most of the world’s superpowers, many of the currently marginalized regions hold great promise. Hopefully Distributism will be enacted before they can hurdle themselves down either the Socialist or Capitalist trail of folly. The most promising countries for the implementation of Distributism lie in the Caribbean and the South Pacific islands. While neither capital nor economic growth is particularly noteworthy in these regions, they are smaller and geographically more isolated than their continental counter parts. This already creates an atmosphere of small property holdings and reasonable economic independence from other lands. Furthermore, the island culture also lends itself to Distributism.. Distributism will most likely have to enter the U.S. at the local or state level, as attempting to do so at the Federal level is not only ridiculously unlikely, but also contradictory to the Distributist tendency towards the devolution of powers. Furthermore, the current level of centralization in the U.S. is very high, and fighting the mega-corporations must come from the bottom up.

Distributism is a novelty in economic theories, perhaps because it is not extremist in either direction. The Distributist model fits the socioeconomic lock of life and threatens the theories long upheld by the world. Thus Capitalism and Socialism both attack Distributism desperately, hoping to retain their deathly grip on the freedom of humanity. Only then do they run into a surprising Distributist who never knew that he was one: Thomas Jefferson.

3 comments:

Fascinating. I knew Chesterton was a distributist, but since I hadn't actually read any of his writings on the subject, I didn't know a great deal about it. There is one thing that is unclear to me, however.

You seem to imply that Distributism will make less goods, but because these goods will be more expensive and wages will be higher and there will be no waste of products that nobody wants to buy, people's level of wealth will not really change. Am I interpreting you correctly?

I haven't read your essay yet, but I'm about to. Here is a link to one that I wrote (for my college writing class :) You can skip the introduction in Spanish, by the friend who blogged it for me.http://casadesarto.blogspot.com/2005/05/chestertons-distributism-and-happiness.html

That is interesting! I like how you focus on the idea that economics is for men, and not vice versa, and so any economic theory needs to take into account that men need more than a multitude of cheap products or a lot of money.